If no reform, huge pension costs to hit teachers: MOE

By Rachel Lin, Wu Po-wei and Jake Chung  /  Staff reporter, with staff writer

Should the government fail to reform pensions, educators themselves would face much heavier tax burdens, as the shrinking number of teachers means that individuals will have to pay a higher proportion of their salaries into the pension fund, the Ministry of Education (MOE) said.

The ministry said it based its calculations on a report it issued last year detailing expenses for pension payouts under the current system.

Of the 118,000 former teachers on the monthly pension payout program, about 50,000 retired within the last decade while 6,728 retired last year, the report said.

The ministry reported a spike in retirement rates for teachers in recent years, with 3,000 retiring from public schools in 2015.

An estimated 8,000 elementary and junior-high school teachers are to retire by 2020, the ministry said.

The reduced numbers of working teachers — due to low birthrates — means that higher proportions of their salaries would have to go toward paying pensions, the ministry said.

Annual pension payouts are set to peak in 2026, with the government expected to pay at least NT$140 million (US$4.51 million) in that year tocover the pensions of educators and civil servants.

The Educators’ Pension Fund (教育人員退撫基金) might well become insolvent before 2030, the Ministry of Civil Service said.

Another fund should be established, National Federation of Teachers Unions president Chang Hsu-cheng (張旭政) said.

All monies saved from implementing reforms, which include phasing out the 18 percent preferential saving rates for educators, civil servants and military personnel who retired before 1995, should be allocated to the pension fund, Chang said.

The preferential saving rates were implemented in 1958 due to the perceived low income of educators, civil servants and teachers in comparison with other occupations. It was abolished for all members of these professions who retired after 1995.

According to 30-year-old elementary-school teacher Cheng Chia-wei (鄭嘉偉), the pension fund problem affects all teachers under 50 who are still working.

Teachers under 35 might see the fund going bust before they have even retired, Cheng said, adding that the pension system should be reformed so younger teachers can get decent pensions.

In related news, the civil ministry said that in 2015 alone, 12,000 civil servants retired — the highest number in a single year over the past decade.

The number of civil servants is declining, the Ministry of Civil Service said, adding that the number is expected to decline a further 3 to 5 percent from its current 340,000.

Without reform, civil servant pensions would cost NT$160 trillion over the next 30 years, the ministry said.

The bill rises to more than NT$340 trillion when combined with teachers’ pensions, the civil ministry said.